The market for small cars has become increasingly competitive with a variety of models available for under $20,000. Most cars in this category fulfil industry regulations such as electronic measures for accident prevention, airbags, and other crash safety features. Fuel economy and improved performance are other essential factors considered by automakers when designing their cars. The main competitors are Honda Civic, Hyundai Elantra, Kia Cerato S, Ford Fiesta, Nissan Sentra, Chevy Sonic, VW Golf, Toyota Corolla Ascent, and Mazda Neo. These cars are packed with essential safety and travel features, have a resale forecast of over 50%, high fuel versatility, and cost under $20,000.
Due to the changing market dynamics and increasing customer preferences, new market entrants are experiencing improved market share. Car market statistics for 2015 reveal that Toyota Corolla has sold the highest number of units. However, Hyundai Elantra, Honda Civic, Chevrolet Cruze, VW Golf, and Nissan Sentra have also sold a higher number of units in different markets across the world. These statistics show that specific car brands or car models no longer dominate the small car market.
In terms of the product factor, automakers have identified specified aspects that appeal to the needs of consumers in the lower market segment. The first aspect that is mandatory for most cars entails fulfilling industry regulations. Passing tests related to industry emission standards, electronic measures for accident prevention, airbags, and other crash safety features comes first. The second important factor involves fuel efficiency. Small cars offer unmatched efficiency in terms of fuel economy. Third, power transmission also plays a fundamental role in the manufacture of small cars. Cars must be able to deliver a significant level of performance.
Promotion of small cars is undertaken using a multiplicity of strategies. Billboards, TV Commercials, Newspaper, and internet marketing are some of the common promotion strategies. Email marketing is a common strategy used to market these vehicles to existing customers. In terms of price, smaller cars are priced under $20,000 in order to appeal to the needs of the market. However, the price varies depending on the additional features included in the vehicle. Finally, automakers in the small car market are developed and own expansive distribution channels. As such, the target market for their products is wide.
Differentiation in the small car market involves offering products competitively and meeting industry standards. However, offering increased value involves delivering a quality but competitively priced vehicle. In this case, the value refers to fuel efficiency, power transmission, and quality. Consumer appeal is created if the above values are specified.
In a capital-intensive industry, the barriers to entry are usually high. As such, it takes time before a new market entrant obtains the economies of scale to enable it to exert significant levels of competitive pressures to already existing players. For this reason, the entry of our small car into the market might not be felt at first because our lack of developed economies of scale. Second, most consumers in the market associate themselves with renowned car brands and being new market entrants, competitors are less likely to pay significant attention to our product. However, with appropriate marketing strategies, unique product, and competitive price, it will not take long before industry leaders appreciate the presence of our product in the market.
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